In the single scheme estimator tool it adds on, rather than includes, my state contributory pension to the total projected benefit
That's correct.
My understanding of Page 32, where it says integrated, is that the benefits accrued already take account of the contributory state pension, not that the contributory state pension will be deducted from the benefits accrued.
Spot on.
If you are a member of the Single Scheme, you get a statement every year from your Single Scheme pension administrator (Annual Benefit Statement as at 31 December 20XX) showing your:
- accrued lump sum benefit,
and
- accrued annual pension benefit.
At the point of retirement, it is these figures that your public sector employer will pay you.
There is
no deduction or offset or adjustment to
these accrued benefits for the State Pension Contributory (SPC).
You then,
separately, make a claim to the Dept of Social Protection at age 66 for your SPC.
The Dept will look at your PRSI contributions from when you entered the social insurance system and factor for any Homemaker / HomeCaring periods etc and determine your SPC amount based on that record.
What the Single Scheme was designed to achieve at a
big picture level was that if you were a full-time member of the Scheme for 40 years, you will broadly expect to have at the Scheme's retirement age of 66:
- a lump sum of 1.5x your career average earnings (inflation-adjusted), and
- an annual INCOME of approximately 50% of your career average earnings (inflation adjusted),
taking into account the annual pension paid to a member from the scheme and the SPC. This is what it means when it says on page 32 of the booklet:
"The Scheme takes account of the Contributory State Pension as part of the total pension package, this is referred to as an integrated scheme."
So, this is what someone can expect on Day 1 of a 40 year membership of the Single Scheme.
If you are in Year 2 of your Career, and you want a forward-looking estimate of your annual pension from the Scheme you utilise the 'Estimator' tool on the Single Scheme website.
However, if you are about to retire from the scheme you look to the 'Annual Retirement Pension' figure on the latest Annual Benefit Statement for what the Single Scheme will pay you annually.
If someone joins the Single Scheme late in life at age 61 and is a member for 5 years, they will accrue benefits under the Scheme of whatever 5 years amounts to
and if they have 35 years of PRSI contributions from previous employments, they will get a full SPC from their 35 years of contributions from previous employments and the 5 years from the most recent employment.
At the end of Year 5, when that member is about to retire from the scheme and is looking at the 'Annual Retirement Pension' figure on the Annual Benefit Statement, no adjustment is made to that benefit figure for the SPC.
Always look to your Annual Benefit Statement which will show the accrued annual pension amount. The 'Annual Retirement Pension' is the benefit that
the Single Scheme will pay on an annual basis into your hands - end of. Assuming the Minister for Finance approves of it, the pension-in-payment should increase thereafter in retirement at the rate of inflation.